Kansai Electric Seeks 11% Household Electricity Rate Hike

TOKYO, Nov. 26 (Kyodo) — Kansai Electric Power Co. applied to the government Monday to hike household electricity rates by an average 11.88 percent from April 1, after seeing its business conditions worsen due to rising fuel costs from running thermal power plants to make up for the loss of atomic energy.

The Osaka-based company would become the first utility after Tokyo Electric Power Co. to resort to such action since the Fukushima Daiichi nuclear power plant disaster last year, which has left many reactors in the country idle amid safety concerns.

Other utilities that have relied relatively heavily on nuclear power as a source of energy supply before the crisis are likely to take similar actions, possibly leading rate hikes to spread nationwide and creating downward pressure on the economy.

If Kansai Electric is allowed to raise household electricity charges, it would be its first rate increase based on a thorough cost review since 1980.

Economy, Trade and Industry Minister Yukio Edano, who has the authority to approve the rate hike, has said earlier that his ministry will "strictly examine" the costs the utility seeks to pass on to consumers.

The utility also announced the same day that it has decided to raise electricity bills for corporate users by an average 19.23 percent from April, a move which does not require government approval.

Kansai Electric owns 11 reactors, but only two of them, at its Oi plant in Fukui Prefecture, are currently online. No other reactors are operating in the country and prospects are unclear on when they will be restarted.

Still, the utility devised the rate hike plans based on the assumption that two reactors at the Takahama plant in Fukui on the Sea of Japan coast will be reactivated.

According to a senior official of the company, moving the two reactors will help the utility cut about 160 billion yen in fuel costs annually.

Kansai Electric reported a group net loss of 116.79 billion yen for the April-September period, its biggest net loss for the half-year period.

In the case of TEPCO, the operator of the Fukushima Daiichi complex, it first applied to raise household rates by an average 10.28 percent but was asked to trim the margin of the hike to 8.46 percent following the government screening process.